“To help bring projects to life”, this is the stated mission that Brooklyn based company, Kickstarter, lives by since their launch in 2009. This world renowned crowd funding platform allows users to submit projects, be it art work, designs or products, in exchange for tangible rewards or experiences to those that support the campaign. Crowdsourcing is an activity that was once practiced by big organizations, also known as venture capitals or angel investors. This is one of the ways in which start-ups can raise funds needed to expand, start and or support their business. Similar to Kickstarter, in exchange for their monetary support, the company will provide some form of equity or stake within the company. The ultimate goal is an exit by means of either an Initial Public Offering (IPO), merger or an acquisition down the line.
What’s new about Kickstarter is that the amount of investment a person can provide to the company is much significantly smaller (think lunch money). Though individually we may only be able to contribute a smaller amount than venture capitalists, the sheer amount of so called “backers” increases the contributions tenfold. The most funded Kickstarter campaigns brought in a whopping $20,338,986 in 2012 and overshot its initial goal by over 4,067% (Ref 1). This is an example of what happens when a great idea is placed in a public forum and achieved virality. It is important to note, however, that most projects that appear on Kickstarter are typically within the starting phase of their life cycle. This means that most of the projects would take months and most often years before any of the backers would get their hands on the promised product. This is something to take note off but as the result of this platform, it enables creators, tinkerers and producers that may not initially have the funding, to “kick start” the project. Many of these products are revolutionary but the lack of funding make it impossible for the creators to mass produce them in a large scale. Such is the case for the smart watch Pebble which achieved the title of the most funded project on Kickstarter (as noted above). Also known as Pebble Time, it is arguably one of the first smart watches in the market, even before android or iOS based smart watches were anything more than an idea. Apple took 2 years after the launch of the Pebble to release their own version and even then, many die hard smart watch users would still revert back to their Pebble.